This reference for a preliminary ruling concerned the interpretation and validity of Article 11 of Council Regulation 320/2006.
Regulation 320/2006 was adopted in order to bring the Community system of sugar production and trading into line with international requirements and to ensure its competitiveness in the future by launching a profound restructuring process of the sector leading to a significant reduction of unprofitable production capacity in the Community.
To that end, it established, by that regulation, a separate and autonomous temporary scheme for the restructuring of the sugar industry in the Community. Within the framework of that temporary scheme, Regulation 320/2006 established an economic incentive in the form of restructuring aid, intended for undertakings with the lowest productivity and designed to encourage them to give up their quota production. To that effect, Article 3 of that regulation provides for restructuring aid for four marketing years – the years 2006/2007 to 2009/2010 – with the aim of reducing production to the extent necessary to reach a balanced market situation in the Community.
In order to finance that restructuring aid the Council set up a temporary restructuring fund and in particular decided that the financing for those measures would be ensured by raising temporary amounts from those sugar, isoglucose and inulin syrup producers which will eventually benefit from the restructuring process.
The referring court inter alia asked whether Article 11 of Regulation 320/2006 was contrary to the principle of conferral to the extent that it would permit the introduction of a general tax which was not limited to covering the financing expenditure for which the temporary amount was intended.
The Court held that it was necessary, in the light of the order for reference and the observations lodged before the Court, to examine the validity of that provision also in relation to the obligation to state reasons, the principle of proportionality and the alleged unjust enrichment of the European Union.
Agrana Zucker argued that the levying of a tax which was used to finance measures which fall outside the common organisation of the markets in the sugar sector would vest that tax with the character of a general tax the imposition of which does not fall within the competence of the European Union.
The Court held that since it intended to contribute to the restructuring of the sugar industry in the Community, the raising of the temporary amount was a common agricultural policy measure lawfully adopted on the basis of Article 37 EC (see Case 265/87 Schräder HS Kraftfutter , and Case C-8/89 Zardi ).
According to the Court, the fact that a revenue surplus might arise on the expiry of such a temporary multiannual restructuring scheme, inter alia because producers had ultimately had less recourse than expected to the restructuring aid offered in return for the renunciation of production quotas, did not call into question the competence of the EU legislature to adopt that measure; nor did it divest the measure of its character as an agricultural measure.
The Court first of all argued that the legality of an EU measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted (see Joined Cases 15/76 and 16/76 France v Commission ) and could not in particular depend on retrospective considerations relating to its efficacy (Case C-449/98 P IECC v Commission )
Second, in so far as any surplus in the restructuring fund was assigned to the EAGF, of which that fund formed part, the surplus continued to be earmarked for financing common agricultural policy measures only.
It followed that Article 11 of Regulation No 320/2006 was not contrary to the principle of conferral.
Alleged unjust enrichment of the European Union
Agrana Zucker also submitted that the raising of the second instalment of the temporary amount for the marketing year 2008/2009 constituted unjust enrichment of the European Union and that the sugar producing undertakings are therefore justified in calling for the repayment of that second instalment, which was unlawfully levied.
The Court however held that a claim for restitution based on unjust enrichment of the European Union required, in order to succeed, proof of an enrichment on the part of the European Union for which there was no legal basis and of impoverishment on the part of the applicant which was linked to that enrichment (see, to that effect, Case C-47/07 P Masdar (UK) v Commission ).
The Court held that Regulation No 320/2006 was valid in the light, specifically, of the principles of conferral and of proportionality and that the raising of the second instalment of the temporary amount for the 2008/2009 marketing year, notwithstanding the appearance of a surplus in the restructuring fund, was therefore not without valid legal foundation.
Consequently, the raising of that instalment did not constitute unjust enrichment of the European Union which might properly found a claim for restitution and, in any case, could not be relied upon for the purposes of assessing the validity of Article 11 of the regulation as the legal basis for raising that instalment.